Navigating Innovative Collaborations with Joel Krikston of Merck Global Health Innovation Fund and Michael Meucci of Arcadia

1 month ago

Episode description:

In this week’s episode, join us as we uncover the dynamics and strategies behind fostering successful collaborations between established corporations and innovative startups in the digital health industry.

We delve into a real-world example of strategic partnership as we sit down with Joel Krikston, Managing Director at Merck Global Health Innovation Fund and Michael Meucci, CEO at Arcadia. Listen closely as they provide an invaluable roadmap to navigate the intricate terrain of corporate-startup collaboration — both raising capital and value add beyond that capital.

Drawing from their 6-year partnership, Joel and Michael shed light on the intricacies of fostering symbiotic relationships between startups and seasoned corporate giants. We explore both parties’ shared values, mutual goals, and their unyielding commitment to innovation.

This conversation perfectly encapsulates the theme that has threaded through the current season of Agile Giants. Tune in now and be inspired by their wisdom, experience, and a shared vision for a brighter future in healthcare and beyond.

Show links

WEBSITE

Full Transcript:

Sean Ammirati (00:20): Welcome to this week’s episode of Agile Giants. I am really excited to have with us today, Joel Krikston, Managing Director of Venture Investments and Head of Strategic Innovation Alliances at the Merck Global Innovation Fund and Michael Meucci, CEO of Arcadia.

The Merck Global Health Innovation Fund is a growth investor that collaborates with innovative digital health and data science companies, propelling biopharmaceutical operations and enhancing patient care.

One of their remarkable portfolio companies is Arcadia, a cutting edge health data platform and analytics company, empowering healthcare organizations to unlock the power of their data, enabling success in networks to thrive in value based risk models, and delivering digital transformation

As we move towards wrapping up this season of Agile Giants and we venture deeper into the world of corporate and startup collaboration, I think today’s Conversation with Joel and Michael really perfectly aligns with our overarching theme and really provides a bow on the season.

They’ll also share their experiences working together as well as how Arcadia has partnered with a number of other large established companies. While their story is interesting, I also believe it provides a roadmap for many other similar companies. I really hope you enjoy this week’s conversation.

Sean Ammirati (01:21): Joel, Michael, thank you so much for joining me today. I really appreciate you taking the time for Agile Giants. I previewed a little bit of where we’re going in the intro, but can you start by maybe giving your elevator pitch for the Merck Global Health Innovation Fund and Arcadia, respectively? Joel, you can go first.

Joel Krikston (01:36): Sure. Thanks, Sean. Great to be with everybody. Michael, always great to see you. So, the Merck Global Health Innovation Fund has been around for 14 years now. We’re actually one of four venture funds that Merck and company operates. We have a global remit. It’s a 500 million Evergreen fund, and it was really created to explore the intersection of emerging technology and our business as a pharmaceutical company.

Importantly, we are not the fund that invests in new therapeutics, Merck has a designated fund specifically for that. But what we really look at, and this is where we come into the world of digital health, are adjacent technologies that are changing the way patients access care, tools that are changing the way we do pharmaceutical discovery, even the way we protect and secure our supply chain.

So, the fund today has about 35 active investments. I’ve been with Merck for 10 years now. I support the commercial organization for the fund, looking at use cases that touch patients and our provider customers. And it’s great to be with all of you today. Look forward to the conversation.

Sean Ammirati (02:41): Awesome. Michael, can you go ahead and tell us a little bit about Arcadia?

Michael Meucci (02:47): Happy to. Great to be here. And Joel, good to see you too. Arcadia is a healthcare data platform business. We sarted the technology arm of Arcadia in about 2010. And our initial focus was helping healthcare lift and shift analytics to the cloud. If you think back to 2009, 2010, healthcare was in the height of adoption of electronic health records. And the big promise of the adoption of health record technology, was enabling both digital transformation and enabling consumerism, as well as, really thinking about better clinical decision support. And our business exists to deliver on all of those promises. If you fast forward, you know, 15 years to today, we’ve been able to unlock a tremendous amount of value in the data sets that are collected by healthcare every day.

If you look at the healthcare sector, the, the compound annual growth rate of the size of the data set that is produced by healthcare outpaces manufacturing, it outpaces retail, it outpaces financial services. But at the same time, healthcare is an industry that uses data much less comprehensively completely than those industries.

And we’re in the midst of two parallel transformations. There’s a giant payment reform movement, which is going to determine the next set of winners and losers. And there’s a huge digital transformation that’s happening too, enabled by not just data, but generative AI and a bunch of new technology that is coming into the healthcare ecosystem to drive systemic transformation in the way that patients receive and, and are provided care. And Arcadia exists to be the unifier of those two major transformations through data, by unlocking the power of that data to enable better care for patients and, and better work experience for providers of care.

Sean Ammirati (04:36): That’s great. And I do want to get back to those kind of themes of transformation in healthcare, but I do think kind of on the front end, Michael, as we set some context here. When we did our prep call, you talked about counseling entrepreneurs to be upfront about what you’re looking for from the investors that they choose to work with.

And so I think that’s kind of important, maybe table setting. And I thought the way to get to this might be to talk about how that advice may be informed by the financing strategy you guys have used at Arcadia.

Michael Meucci (05:05) : Yeah, you know, the financing strategy at Arcadia has been a hybrid of working with large institutional investors, folks like Vista, as well as strategic balance sheet investors, organizations like Cigna and Merck.

In all cases, all investors have brought capital, which is the most important part of our financing relationship. But what we found most unique about our strategic investment relationships with Merck is the ability to get access to executive minds and get executive mindshare from organizations that are buyers of it.

And one of the things, you know, Joel and I, Joel and I worked together six years, seven years?

Joel Krikston (05:45): Yeah, the whole slate. Yep.

Michael Meucci (06:04): And what I think is most beneficial about our relationship with GHI, is if I’m working with our product organization or our research organization and we have an idea for a new product, and I want to get the ears of the head of oncology, I have access. Whereas if I was a startup who didn’t have the relationship with the fund that I do, and I was trying to get ahold of someone on the vaccines team or the cardiovascular team at Merck, I’d just be another person emailing them asking for five minutes. And so Joel and his team have been very helpful in connecting us with senior leadership who can help and form our product roadmap, but it creates a really symbiotic relationship because if we develop a product that aligns with a business problem for Merck.

That means that it generally will have product market fit with the other top pharmaceutical organizations across the country and around the world. And at the same time, if they like it enough, you get a built in alpha or beta customer and that benefits Merck as well, because they typically get the benefit to shape the product to meet their use case most effectively.

Sean Ammirati (06:53): So Michael, I was going to get to this later, but Joel, I do want to kind of pause for a minute and just let you jump in and talk a little bit about how you make those connections too, because I think it sort of, again, begins to make this more tangible as we set the table here.

Joel Krikston (07:09): Yeah, I love that. We’re really the flip side of the coin, right?

If I think about my relationship with Michael and maybe just to take a step back. So as a fund, we have a methodology we call enterprise coverage. And what it really means is I spend half my time as an investor with my Merck colleagues in the business, understanding what some of the challenges are that they face in their business. It could be testing deserts. It could be dropping vaccination rates for HPV, it could be the fact that we know that there are complicated indications out there and new approvals for things like our oncology portfolio, but clinicians and patients struggle to have access to that information. So as I learn what the business is struggling with, I think what makes us special is that we thrive in through venture capital, oil companies to create these ecosystems of capabilities that we can tap into to say, what’s a different approach to trying to support our patients? What’s a different approach to trying to address some of the challenges, perhaps a clinician faces gaining access to clinical trial data, etc.

And just like Michael sort of shares the analog of being able to get access to a senior executive in a life sciences company. What’s great for me is that I can go to Michael and his team and say, sort of in this translational role. This is the challenge, how do we use some of what your presence is, and particularly your relationship with providers to think about novel solutions to these challenges.

Another great example of that, for example, is looking at patient journeys and some of the longitudinal looks that we can really get through a platform like Arcadia, where Arcadia’s providers may be saying, this is an issue for us too.

There’s a real win-win opportunity for us to partner together around this unified technology, which is Arcadia, and do something really impactful for patients. So I think it’s looking for those opportunities and sort of balancing the use case, if you will, clinically or from a patient, clinician perspective off of the capabilities of a technology and how it might solve it.

Michael Meucci (09:02): I think the other thing that’s important, too, is when you’re seeking capital, understanding what your capital partner’s expectations on the business are and the time, right? And everyone is doing this because they want to get it right. Whether you’re on an entrepreneur looking to drive a return on your sweat equity or you’re a Merck looking to forge partnerships to not only drive a return on capital, but addressing a use case of the market or you’re Vista and you’re just a large cap fund, understanding as an entrepreneur what you’re getting into and what that investor is looking for from your platform is really important. And I think what has been unique about our financing strategy is bringing together the best minds and institutional capital and strategic investors.

And frankly, individual investors who helped us along our way, who all have a vested interest in seeing the business thrive and flourish. We’ve been really fortunate. We don’t have pumping up investors who want to get in and get out in three years and drive growth over anything or profitability over anything.

And so we’ve been able to strike a real nice balance of growth, profitability and innovation at the same time.

Sean Ammirati (10:10): Yeah. So maybe to build on that, like, how do you think Arcadia is different because of the cap table that you’ve assembled? Maybe if you were to pass it with some of your competitors and be as specific or as general as you feel comfortable there.

Michael Meucci (10:23): Yeah, no, I think it’s a great question. I think what our investor mix has allowed us to do is to build a high quality product. If you look at, you know, we’re a really unique time in the capital markets. I’m sure Joel, you see this too.

Last year, decided that growth was no longer king and the profitability really mattered. And I look at a lot of our competitors who have only institutional money and you’ve seen, bright, shiny stars become, you know, red giants overnight because their easy access to capital is gone, and they don’t have business stakeholders from a strategic on the other side saying, you know, we can help you think through how do you expand profitability or how do you expand growth or how do you think thoughtfully around which products you launch.

And we’ve been really fortunate that we’ve both had the time and the space to think about profitable, scalable growth over the last five, seven years as we’ve assembled our balance sheet. We also haven’t had the challenge of, you know, trying to just hit a growth rate. Joel’s a member of my board.

And I think Joel, I can say in all honesty, like there’s not been a board meeting where someone says, you know, how do you get to a hundred percent growth? We talk about key SAAS metrics as SAAS business, like rule of 40 and gross margin and growth rate and profitability. But I think what’s different in my boardroom that I think a lot of my peers where I talked to all the time, is just there’s less of a maniacal focus on a rule of X needs to be 80 or, you know, if we’re not launching 10 new products a year, we’re not a successful growth company. And there’s been a much more balanced focus to building the company and becoming a critical part of it. It’s a little bit more of a long game. I think.

Joel Krikston (12:18): I would add to that too. I think Sean, for those who may listen to this and have any experience trying to sell into big corporates, which is not for the faint of heart. It’s a huge investment upfront by teams like, you know, Michael leads. And a lot of times it may take six months, nine months to find the right customer thing that you have.

Particularly in the space I think we’re operating in where a lot of times we’re looking at a platform that may not have off the shelf solutions for life sciences and saying, what’s possible if we get the right folks in the room, like minded stakeholders, providers, pharma around a specific use case and we’ll work together. How do we solve that problem? That takes some time.

And once you’ve built that relationship and you know, delivered some really meaningful results, I think, in terms of improving patient care, driving to clinical outcomes, that’s the kind of return on a relationship that can really start to become meaningful for companies like Arcadia. And I think Michael sees that with some of the strategic partnerships that he’s got.

When we look for companies in the portfolio from a strategic value lens, we’re not looking for a company that solves for a single use case. We’re looking for a firm that can do a lot of things. Michael, I was sort of, just for fun, jotting down some of the things I think you and I have batted around over the last eight years, and it’s probably 15 or 20 different conversations inside Merck, looking at everything from real world data, to trying to figure out how to solve some really challenging diagnostic triage problems that prevent patients from getting to care, to vaccines, to oncology, to the list goes on and on.

So. you really become an extension of, it’s more than a vendor relationship. It’s really a co-collaborator and a thought partner as we try and use these new technologies in ways that benefit our customers. So I think that return too is pretty interesting and gives some of that patients in the boardroom, certainly for me as an investor, I think about what next can I do with Arcadia from a collaboration perspective, almost more so than I think of what’s the exit. You know, when does Arcadia get sold or public or whatever the exit pathway is.

Sean Ammirati (14:14): So I do want to get to Michael, how that impacted your journey, but Joel, just like, I think one context question that’s helpful on the CVC side there is. How does your mandate from the rest of Merck influence that as well? Like, I’m sure they want you to make money, but it sounds like there’s other metrics that they’re looking at as well when they just evaluate the effectiveness of your fund.

Joel Krikston (15:44): To be clear, we take our role as a financial investor very seriously. We don’t ever want to be thought of as sort of dumb corporate money that flares up. You know, it goes to a bunch of conferences, makes some bad investments. Hence the CFO lost four years later and the fund is gone.

I think being here for 14 years, I’m very fortunate. I came from JGDC, which is the second oldest corporate venture fund in any industry. I think they started in 1973. So both of those tools that evolved and matured internally to the place where they were really viewed as strategic extensions of a business development capability. Not there’s some new technology. let’s go chase after it with venture capital.

Having said all that, we also operate in an incredibly compliant and regulated environment. So, so we think very, very carefully about what does strategic value mean. Sometimes that could be the publication of a paper. Sometimes, it might be something that we do in collaboration with other partners, nonprofits, etc, to drive awareness around certain disease types.

You know, there are lots of gates we go through internally to understand what strategic value means and how it can be measured. But to be clear, we try very har to make the case that beyond the financial return on an asset like Arcadia, you know, we really are doing things that are perfectly aligned with our mission and vision as a life sciences company that relate to our patients, therapeutic areas where we focus and the products, obviously, that we have.

Sean Ammirati (16:14): Nice. So, in a minute, Joel, I’d like you to talk about how maybe Arcadia is similar and different from other portfolio companies, but first Michael, just talk a little bit about those, 15 different ideas that you brainstormed and that the sort of access like, how has that impacted your journey and growth at Arcadia?

Michael Meucci (16:32): It’s been super helpful. I mean, what’s really nice is having someone come and say, this is a problem we have and being able to adjudicate not only with Joel, but with members of Joel’s team, whether on the fun side or within Merck.

We’re going to understand the problem and saying, okay, what are the user stories that would need to be addressed. And of those 15, you know, there’s one around like patient education, Joel, that we said, hey, this isn’t quarter og what we do, but we actually know a company that kind of does this in a different sector. And like, let me introduce you to them.

And so of the 15, there’s this probably a great Sankey plot of those that we said, hey, we’d love to attack these, but they never kind of reached the level of priority. Those that we say, you know, there’s somebody else who already does this really well and we he connected. Then there are those that we’ve attacked together, you know, we’re running a program that Merck sponsors to focus on trying to drive better disease awareness for certain conditions that are either preventable or address through vaccination or preventive screening.

And that, that investment in partnership with Merck has resulted in really elevating patient outcomes. And it helps Merck because they’re able to deliver on their mission, which is, you know, really helping extend life and extend happy and healthy life. And it lines with our mission, which also aligns with my pay our provider customers mission.

So being able to take those 15 ideas and adjudicate them has been really helpful. And it also helps us think through what’s coming down the road longer term. Yeah, I can’t tell you the number of times Joel call and say, hey, we were in this global strategy meeting and someone was talking about this idea of using generative AI to accomplish X skill. I don’t think it’s a negative that at the size and scale that Arcadia is, you know, we’ve roughly 500 employees. We’re oftentimes thinking on like a 18 to 36 month time horizon, and I think that Merck has the luxury of having teams that are thinking about 10 year time horizons.

And so being able to get the influence of, I can’t remember what project it was, I think it was your respiratory portfolio. And, you know, you guys had a team in innovating and someone said, what if we used AI to create a skill for Alexa that accomplished X. And it was two years ago before like everyone was talking about generative AI. And so I think that. Having the resource and thought power behind Merck is allowing us to pull up and think a little bit longer term on our roadmap, too.

It’s one of the big values that we derive from some of these strategic investors. We have that have the luxury of, you know, the resources to think so much longer term, whereas we’re thinking on a much compressed horizon.

Sean Ammirati (20:57): So that’s, super compelling. And I feel like probably has people thinking like, it’s beginning to kind of lean in and make this real for people.

I do want to kind of now generalize this. Joel, can you talk a little bit about how is Arcadia similar and different from the rest of your portfolio? And I would say also for the entrepreneurs listening. How do they know if they should be like be a good fit to chat with you or not? Both those questions I think would be helpful for folks.

Joel Krikston (20:01): Yeah, that’s great. I, so I think, you know, when we invested in Arcadia, it was 2016 and the company was about a fifth of the size that it is today at the top line. But what I can say about Arcadia for that entire 7-8 years so far is the mastery of their domain is incredibly impressive. So, I think part of getting a shot at those 15 opportunities is the fact that over time you build a relationship where I know, and we actually spend time, and I have a team under me that really works on business development function within the fund, trying to do this matchmaking role, but also coaching of a lot of our portfolio companies.

There’s a tendency often to oversell capabilities, to see something like a Merck or a Cigna out there and go whale hunting and assume that. They’re going to make your P&L for the next four years, you know, and that tends to backfire where we call it sort of fracking internally. These portfolio companies get in the door and then they get a little bit out of control.

So we very tightly try and manage that and really act or function as sort of a concierge service internally to get Michael and his team to the right places. I think the second piece of advice is we learned a long time ago that general sort of dog and pony show capabilities meetings really aren’t very good.

It’s, it’s fine. Everyone’s pleasant. You have a bunch of people from a team X who have a specific problem looking at theoretically everything an Arcadia or another portfolio company could do. And then they’re left to figure out what the fit is. What we try and do today is really approach it almost like a baby RFP, where we say, Michael, this is the use case. This is the challenge. When you show up, present your capabilities, present it as a response to this channel. And I don’t know what you think, Michael, but that feels to me like we actually skip about four months of waste. When we do it that way, we just get to a much more focused, much more productive conversation, much more quickly. Clearly today, Arcadia, and even without our portfoli, to to answer your question, is one of the few digital health companies that I think has gotten to a pretty significant critical mass, whether that’s geographic scope, clearly product portfolio.

And obviously some of the financial metrics that come along with that, you know, big tends to like to deal with big, which is the challenge in my role where we’re trying to explain to big that the opportunity is to collaborate with small. And do something new sounds good on paper, but oftentimes really hard to pull off.

I think Michael’s organization is mature enough where they can present as both product experts for what they do, but also know how to manage a much larger organization that’s probably used to dealing with a few vendors who shall remain nameless, but tend to capture a lot of life sciences budget for things like data, you know, outreach programs, those kinds of agency place.

So, so I think that’s another thing that sort of differentiates Arcadia. And then I would just say maybe lastly, we’ve had some challenging projects that have taken a long time to get to a neutrally agreeable solution, oftentimes driven by challenges we have internal and compliance and regulatory. I think Michael has learned. As a partner to say yes to certain things, but to be incredibly focused on the nature of his core responsibility to his customers as well. And when something doesn’t work for Arcadia or he knows it’s not going to work for a customer. He says so. He stands his ground, very transparent with the teams internally, as opposed to saying, yes, yes, yes, the whole way until you can’t actually.

And that again, for us, we try and coach our portfolio companies to do that so that we don’t have to try and manage these complicated off ramps down the road that should have been identified in the very beginning. So those are just a few things that came to mind as you were thinking about that or asking the question, I think what differentiates Arcadia.

Michael Meucci (25:30) And that’s what’s really interesting about that. One of the things that’s really interesting about what Joel just said is. And I think resonates with me is, big tends to work with big. And if you’re an entrepreneur, every entrepreneur starts their business wanting to be the next Amazon.

Like, I don’t know many people who say, I’m going to start a business. I want it to be like a 5 million lifestyle business, especially in the space. We all want big exit. We all want to be a durable, lasting piece of American culture, global culture. And in order for that to work, small needs big. And the thing that’s really interesting was when big works with small, to Joel’s point, sometimes big says, you’re small, you do what we say, and negotiating that push pull is, is really challenging, and that’s been another area where we’ve been able to work collaboratively, because I can say to, you know, on a day to day project, my team can say, “Hey, this doesn’t work for us. We can’t do X the way you need it to be done.” And then we have, you know, Joel and I have a thread where I can say, “Hey, can you help me understand why this is such a big deal?” So I can then contextualize as a leader of our business, say, is this something we have to give on? Or should we really hold our ground? Because… It’s, it’s not going to be something that we can drive sustainability around. And that’s been really helpful.

And as we’ve scaled, you know, Joel’s comments around how we’ve transformed since 2016, we’ve been able to kind of have a step up in the size of the customers we service every year and slowly but surely make our path to being big. I think we’ve moved from small to medium. We’re coming for you.

Sean Ammirati (27:10): So Joel, how do you, how do you convince inside the company that big working with small is a good idea?

Joel Krikston (27:20): I think there’s certainly a desire. There’s no shortage of innovation teams across the life sciences, whether they’re working in therapeutic areas, whether they’re working in enterprise functions.

There’s, there’s more innovation teams than, you know, I could probably spend the rest of our conversation trying to name. Sure. They, they all have a tendency. There’s a lot of energy around startups. There’s a lot of energy around conferences. There’s a lot of energy around. Pick your favorite vendor who’s spinning out their cute eye chart of who the top digital health companies are this year. There’s no shortage of that.

The problem that most of those teams have is that when it comes time to execute, so they’ve spent time with the consultants, they’ve identified the patient journey, they’ve identified the breakdowns of where people are getting tested or not moving to specialist centers or whatever. They have no idea how to get something off the ground and running that would actually solve for them. So there’s this, at least in my experience, this disproportionate weighting towards the front end strategy work versus the back end execution work. And that’s not surprising because you have to know the landscape of partners who theoretically have the capabilities to help you execute.

And then you really need some thoughtful, progressive folks internally who can navigate some of the compliance challenges. So I think what we’ve found is that When we show up to those innovation teams and say, you have a 500 million venture fund. It’s my job to help you understand how to use it. You know, what we can do is build this portfolio of companies around you.

You’re not going to use them every time you don’t have to. We have very clear guidelines for how that works. But when you want to get to domain expertise very, very quickly, it sort of spitballs some ideas around solutions. That big abyss called execution. I’ve got a bunch of entrepreneurs who are very thoughtful and creative that can start to think about what some of those ideas are.

And I think we gradually get these teams to a place where they see that we can help be a part of their execution solution. We’re not competitive with them as the venture fund. We’re actually a tool that can bring expertise to them. And today, we have about 32 of those collaborations running between portfolio companies of ours and Merck teams, literally from manufacturing to drug discovery to clinical trial remission. So that’s the strategic value piece. It takes us time to build that track record with our portfolio companies. But I think they, it’s just teaching them how to actually use, not they want to, they just don’t really know. So they tend to default back to big because it feels a little bit safer, or big just doesn’t have those sort of more novel approaches to solving some of these challenges.

Sean Ammirati (29:50): Yeah, nobody got fired. What do they always say?

Michael Meucci (29:56): You never got fired for choosing IBM?

Sean Ammirati (29:59): Exactly. Exactly right. So, so what about, what about on the other side, Michael, like we’ll, we’ll kind of pivot this conversation to just kind of general best practices. We’ve already hit a few, any, any other best practices that you think are, are relevant for either side of these conversations, the startup or the, the big company?

Michael Meucci (30:20): A couple of, I think a couple of really important general principles is you, you, you give what you put into these relationships. I think that. Joel and I have both invested a lot in collectively understanding each other’s business problems. And that’s, that’s not dissimilar to my relationship with Cigna or other, other strategic investors on my cap table. It would be probably just as easy for me to say, thanks for the capital. We’re going to go run our growth playbook and see Joel on our quarterly board meetings.

So I think that, you know, part of part of partnering with strategic needs to be a commitment to working with them. And also understanding that just because you have Merck on your cap table doesn’t mean you’re going to have a contract. Like, that’s the other problem. I think you guys invested, Joel, in 2016, and we had our first contract in 2019.

And there was a lot of, a lot of those, you know, those 15 conversations that happened in those early years where we were identifying, is this something we can help address? Is this a problem, a problem for Merck at the time? Are we the right solution? You know, like, there may be… It may not be another big, it may be another small who can solve the problem better than we can.

And so you, you, you have to invest in care and feed the relationship. And I also think that you have to, to Joel’s point, no one to say no. There are going to be those problems that come up to you where it’s like, hey, it’d be really great if you could solve this problem with patient education for X therapy.

And you got to say, hey, like that, that isn’t our core strategy. Like, as we think about how we’re going to be this critical piece of healthcare infrastructure. That’s not the box. That’s not one of the boxes we want to check, at least not in our current phase of growth because we’ve got these five other boxes we’re in the progress process of filling in and checking which is going to accelerate our growth rate or accelerate profitability.

And so there’s, there’s a real need to have open lines of communication, invest in that relationship and then also understand where your boundaries are.

Sean Ammirati (32:20): Nice. Joel, just same question to you, I guess. Some best practices that you’d like to highlight from, for the more general, not just this relationship, but in general.

Joel Krikston (32:27): Yeah. Yeah. Yeah, I think, you know, the first one probably would apply to any conversation with an entrepreneur starting a business, which is figure out one thing that you do well and do that thing really well, then move to the next one. It kind of works that way in library with some of these commercial collaborations.

And, and again, I use this term fracking, which we use sort of, you know, it’s a more comedically inside the fun, but we, we have companies that we invest in where the CEO is just, they can’t help themselves, but start dialing for dollars or they start chasing sort of business from the top down, which is really understandable.

It’s, it feels intoxicating if you happen to end up at a conference with the head of pick your functional area for lurk, and you’re trying everything you can to sell that person some piece of business. It just doesn’t work. You know, those people had legions of teams underneath them. Those teams have very specific remits.

You know, what we do is build that support from the bottom up. So I think one thing that’s really important is when you get that first project, even if it feels relatively small, the execution on that, and Michael, you’ve seen this now, and I’ve seen it with a bunch of our other portfolio companies, Once you get that sponsor internally, and it gets back a little bit to that execution chasm that I was describing, they now see a pathway where for similar types of programs, they’ve got a partner who can help them ideate around solutions.

And it almost starts selling itself, truly. I mean, I’ve seen some of our commercial partnerships grow. Across multiple use cases with the same vendor who’s becoming a bit of an off the shelf name, maybe just under the bigs who have populated that column for a long time and they’re starting to win, you know, sort of a disproportionate share of business.

So I think the focus thing don’t promise your board the multi million dollar contract with your new large cap strategic investor in the 18th month of your relationship. Let it build a little bit, that can be really hard for companies, particularly in this environment and be patient around that, but I think that does pay off. I, you know, I think that’s probably the biggest one. Maybe the second one is just the metric, which I think Michael and I have learned some lessons on that too, along the way, but. These are groups of people who are, you know, highly, highly trained in whatever it is that they do. And oftentimes, at least in my experience on the commercial side, digital health solutions are competing with things that are a little bit more well understood from sort of a digital marketing.

Where ROI measurements are much cleaner, clearer. You may even be able to report out on things in a way that wouldn’t be compliant looking at a different kind of delivery mechanism through a digital health company. And even if we all know in our heart of hearts that a program works, if we don’t get the right metrics to hand back to that internal sponsor, it’s tough sometimes to scale.

Because you need that sponsor to go site for more of their budget to do another project and another project. But we haven’t given them the evidence that they need. So, and it sounds maybe a little bit cliche, but the metric thing on the back end is really critical for the companies we see being successful because they’re speaking the language of their life sciences customer, which goes a long way towards scaling the relationship.

Sean Ammirati (35:42): Yeah, that’s awesome. So I could do this all day, but I promised your EAs that you’d be done basically now. So I’m going to steal just one more minute, which is, maybe just ask each of you to give us like one more kind of final message or takeaway that you’d want to leave our listeners with.

And Michael, maybe we start with you and then Joel have you wrap it up.

Michael Meucci (36:05): One more. One more. I think my final message is that, as I look back at the growth of Arcadia and what the team has been able to accomplish, so much of our growth has been fueled by those kernels of, “wouldn’t it be great if there was a solution that could help connect patient in real time with a gap”, or “wouldn’t it be great if there was a solution to accomplish X”.

And what we get more of from our strategic investors are those great what if scenarios and with it, smart brains who deal with these problems every day to help us think through how to solve that what if scenario. So if you’re an entrepreneur, you’re seeking capital and you have an opportunity to engage fund like Merck or other strategic investment funds, I would really encourage you to take it seriously. And as you think about your capital strategy, there are a bunch of different needs outside of just cash that every business has.

And I wouldn’t trade the experience we had with Merck for any other source capital that I could think of because it’s helped us lock in on a number of solutions that are a big part of our growth. And so I think that’s kind of what I would leave the audience with is make sure that you know what you want and, and make sure what you have and you maximize it.

Sean Ammirati (37:30): Awesome, Joel.

Joel Krikston (37:35): Yeah, that’s great. That’s tough to follow. You know, I think the thing that strikes me is whether you’re Merck or you’re Arcadia or you’re an entrepreneur listening to this, I think we tend to think in a pretty linear way, which is, I’ve built this product andI’m trying to sell it to you. Or we have this therapy and we’re trying to drive patient identification. So I have my problem, you have your problem, and then maybe somehow we’ll magically have them connect somewhere out of the ether.

I think what I learned working with Arcadia because of their very unique role in the industry and their relationship with this other massive stakeholder group called Providers is there’s actually a lot of win-win-win type solutions out there where we don’t all have to go do it alone. What I love about companies like Arcadia is I can find some other stakeholders, maybe even some other investors, we’re doing this with other companies of ours too, where we can take this unifying platform and say, let’s get a group together and sort of figure out a solution we can rally around using this company’s technolog.y And it’s important for you, clinician, because of whatever value based contract you’re in or an outcome you’re trying to get to with a patient or your health system It’s important to life sciences because they’re trying to disseminate clinical research. It’s obviously important to the patient etc, etc.

There’s so many of those out there, and I think we tend to think of these healthcare stakeholders as sort of, you know, embedded, natural enemies, all trying to grab their piece of some kind of a profit pool, but we’ve learned to work really well with others through a platform like Arcadia’s, and if you can approach some of these strategics, or you can approach, a lot of times we’re trying to do that thinking as the fund, looking out at a platform and saying, how could we use this technology. But I think if you as the entrepreneur have a bigger vision for the role you play in the ecosystem and how you can maybe be a catalyst like Arcadia is to bring some partners together around a big challenge. That’s super compelling.

You know, it’s sort of the opposite of showing up with the Harvey ball chart where everybody sucks and your, all your balls are filled in. It’s kind of the opposite thinking of that, which I would also encourage you not to do. But you know, that’s the kind of entrepreneur strategic partner we’d love to bring in because we know they’re going to be a thought partner for us across multiple use cases.

Sean Ammirati (40:00) : All right. This has been amazing. We’ll make sure to include links to both of your corporate social media platforms, but just real quickly for listeners who want to stay up to date with both of you personally. What’s the best way for them to do that?

Joel Krikston (40:15): Probably LinkedIn is easiest for me.

Michael Meucci (40:19): I would agree with that. LinkedIn is the platform for me.

Sean Ammirati (40:25): Okay, so we’ll include those links as well in the show notes. Thank you guys so much for joining this. I really can’t thank you enough. This was a great conversation. I hope you have a great rest of your day.